ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Washington
|
|
93-0962605
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(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
901 Fifth Avenue, Suite 1000
Seattle, Washington
|
|
98164
|
(Address of Principal Executive Office)
|
|
(Zip Code)
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Large accelerated filer
|
ý
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Accelerated filer
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¨
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|
|
|
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Non-accelerated filer
|
¨
(Do not check if a smaller reporting company)
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Smaller reporting company
|
¨
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Page No.
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|
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Condensed Consolidated Balance Sheets as of March 31, 2014 and December 31, 2013
|
|
Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2014 and March 31, 2013
|
|
Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2014 and March 31, 2013
|
|
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2014 and March 31, 2013
|
|
|
March 31,
2014 |
|
December 31,
2013 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
187,691
|
|
|
$
|
192,633
|
|
Restricted cash
|
18,100
|
|
|
—
|
|
||
Short-term investments
|
49,916
|
|
|
14,048
|
|
||
Accounts and other receivables, net
|
58,765
|
|
|
182,527
|
|
||
Inventory
|
118,194
|
|
|
95,129
|
|
||
Prepaid expenses and other current assets
|
31,722
|
|
|
20,999
|
|
||
Total current assets
|
464,388
|
|
|
505,336
|
|
||
|
|
|
|
||||
Long-term restricted cash
|
15,100
|
|
|
13,768
|
|
||
Long-term investments
|
7,817
|
|
|
—
|
|
||
Property and equipment, net
|
30,624
|
|
|
30,278
|
|
||
Service inventory, net
|
1,709
|
|
|
1,828
|
|
||
Goodwill
|
14,182
|
|
|
14,182
|
|
||
Intangible assets other than goodwill, net
|
5,764
|
|
|
6,362
|
|
||
Deferred tax assets
|
24,592
|
|
|
19,206
|
|
||
Other non-current assets
|
11,700
|
|
|
12,406
|
|
||
TOTAL ASSETS
|
$
|
575,876
|
|
|
$
|
603,366
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
35,833
|
|
|
$
|
34,225
|
|
Accrued payroll and related expenses
|
10,348
|
|
|
22,470
|
|
||
Other accrued liabilities
|
13,709
|
|
|
22,225
|
|
||
Deferred revenue
|
89,553
|
|
|
91,488
|
|
||
Total current liabilities
|
149,443
|
|
|
170,408
|
|
||
|
|
|
|
||||
Long-term deferred revenue
|
54,167
|
|
|
50,477
|
|
||
Other non-current liabilities
|
6,675
|
|
|
6,894
|
|
||
TOTAL LIABILITIES
|
210,285
|
|
|
227,779
|
|
||
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
||||
Preferred stock — Authorized and undesignated, 5,000,000 shares; no shares issued or outstanding
|
—
|
|
|
—
|
|
||
Common stock and additional paid-in capital, par value $.01 per share — Authorized, 75,000,000 shares; issued and outstanding 40,689,605 and 40,469,854 shares, respectively
|
589,721
|
|
|
586,243
|
|
||
Accumulated other comprehensive income
|
572
|
|
|
853
|
|
||
Accumulated deficit
|
(224,702
|
)
|
|
(211,509
|
)
|
||
TOTAL SHAREHOLDERS’ EQUITY
|
365,591
|
|
|
375,587
|
|
||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$
|
575,876
|
|
|
$
|
603,366
|
|
|
Three Months Ended
March 31, |
||||||
|
2014
|
|
2013
|
||||
Revenue:
|
|
|
|
||||
Product
|
$
|
30,015
|
|
|
$
|
59,868
|
|
Service
|
25,095
|
|
|
19,679
|
|
||
Total revenue
|
55,110
|
|
|
79,547
|
|
||
Cost of revenue:
|
|
|
|
||||
Cost of product revenue
|
23,972
|
|
|
45,570
|
|
||
Cost of service revenue
|
13,201
|
|
|
9,827
|
|
||
Total cost of revenue
|
37,173
|
|
|
55,397
|
|
||
Gross profit
|
17,937
|
|
|
24,150
|
|
||
Operating expenses:
|
|
|
|
||||
Research and development, net
|
22,621
|
|
|
20,226
|
|
||
Sales and marketing
|
11,776
|
|
|
11,143
|
|
||
General and administrative
|
5,413
|
|
|
5,485
|
|
||
Total operating expenses
|
39,810
|
|
|
36,854
|
|
||
Loss from operations
|
(21,873
|
)
|
|
(12,704
|
)
|
||
Other expense, net
|
(646
|
)
|
|
(335
|
)
|
||
Interest income, net
|
61
|
|
|
376
|
|
||
Loss before income taxes
|
(22,458
|
)
|
|
(12,663
|
)
|
||
Income tax benefit
|
9,520
|
|
|
5,054
|
|
||
Net loss
|
$
|
(12,938
|
)
|
|
$
|
(7,609
|
)
|
Basic net loss per common share
|
$
|
(0.34
|
)
|
|
$
|
(0.20
|
)
|
Diluted net loss per common share
|
$
|
(0.34
|
)
|
|
$
|
(0.20
|
)
|
Basic weighted average shares outstanding
|
38,317
|
|
|
37,335
|
|
||
Diluted weighted average shares outstanding
|
38,317
|
|
|
37,335
|
|
||
|
|
|
|
||||
|
|
|
|
||||
|
|
|
|
|
Three Months Ended
March 31, |
||||||
|
2014
|
|
2013
|
||||
Net loss
|
$
|
(12,938
|
)
|
|
$
|
(7,609
|
)
|
Other comprehensive income (loss), net of tax:
|
|
|
|
||||
Unrealized gain on available-for-sale investments
|
4
|
|
|
49
|
|
||
Foreign currency translation adjustments
|
23
|
|
|
165
|
|
||
Unrealized gain (loss) on cash flow hedges
|
(328
|
)
|
|
2,020
|
|
||
Reclassification adjustments on cash flow hedges included in net loss
|
20
|
|
|
(20
|
)
|
||
Other comprehensive income (loss)
|
(281
|
)
|
|
2,214
|
|
||
Comprehensive loss
|
$
|
(13,219
|
)
|
|
$
|
(5,395
|
)
|
|
Three Months Ended
March 31, |
||||||
|
2014
|
|
2013
|
||||
Operating activities:
|
|
|
|
||||
Net loss
|
$
|
(12,938
|
)
|
|
$
|
(7,609
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
|
|
|
||||
Depreciation and amortization
|
3,910
|
|
|
3,429
|
|
||
Accretion and amortization on available for sale investments
|
53
|
|
|
—
|
|
||
Loss on disposal of fixed assets
|
204
|
|
|
1
|
|
||
Share-based compensation expense
|
2,522
|
|
|
1,726
|
|
||
Inventory write-down
|
382
|
|
|
—
|
|
||
Deferred income taxes
|
(9,797
|
)
|
|
(3,866
|
)
|
||
Cash provided (used) due to changes in operating assets and liabilities:
|
|
|
|
||||
Accounts and other receivables
|
124,120
|
|
|
(45,221
|
)
|
||
Inventory
|
(24,127
|
)
|
|
9,617
|
|
||
Prepaid expenses and other assets
|
(5,588
|
)
|
|
(1,200
|
)
|
||
Accounts payable
|
1,612
|
|
|
(2,103
|
)
|
||
Accrued payroll and related expenses and other accrued liabilities
|
(20,884
|
)
|
|
(15,498
|
)
|
||
Other non-current liabilities
|
(218
|
)
|
|
(365
|
)
|
||
Deferred revenue
|
1,760
|
|
|
(10,639
|
)
|
||
Net cash provided by (used in) operating activities
|
61,011
|
|
|
(71,728
|
)
|
||
Investing activities:
|
|
|
|
||||
Sales/maturities of available-for-sale investments
|
9,000
|
|
|
—
|
|
||
Purchases of available-for-sale investments
|
(52,732
|
)
|
|
(14,938
|
)
|
||
Increase in restricted cash
|
(19,432
|
)
|
|
—
|
|
||
Purchases of property and equipment
|
(3,501
|
)
|
|
(1,868
|
)
|
||
Net cash used in investing activities
|
(66,665
|
)
|
|
(16,806
|
)
|
||
Financing activities:
|
|
|
|
||||
Proceeds from issuance of common stock through employee stock purchase plan
|
169
|
|
|
110
|
|
||
Purchase of employee restricted shares to fund related statutory tax withholding
|
(453
|
)
|
|
(340
|
)
|
||
Proceeds from exercises of stock options
|
986
|
|
|
1,373
|
|
||
Net cash provided by financing activities
|
702
|
|
|
1,143
|
|
||
Effect of foreign exchange rate changes on cash and cash equivalents
|
10
|
|
|
(219
|
)
|
||
Net decrease in cash and cash equivalents
|
(4,942
|
)
|
|
(87,610
|
)
|
||
Cash and cash equivalents:
|
|
|
|
||||
Beginning of period
|
192,633
|
|
|
253,065
|
|
||
End of period
|
$
|
187,691
|
|
|
$
|
165,455
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Cash paid for interest
|
$
|
5
|
|
|
$
|
—
|
|
Cash paid for income taxes
|
$
|
1,232
|
|
|
$
|
1,682
|
|
Non-cash investing and financing activities:
|
|
|
|
||||
Inventory transfers to fixed assets and service inventory
|
$
|
680
|
|
|
$
|
1,598
|
|
•
|
The delivered item(s) has value to the customer on a standalone basis; and
|
•
|
If the arrangement includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the Company.
|
•
|
It is commensurate with either of the following:
|
•
|
The Company's performance to achieve the milestone; or
|
•
|
The enhancement of value of the delivered item or items as a result of a specific outcome resulting from the Company's performance to achieve the milestone.
|
•
|
It relates solely to past performance.
|
•
|
It is reasonable relative to all of the deliverables and payment terms (including other potential milestone consideration) within the arrangement.
|
Description
|
|
Fair Value
as of March 31, 2014 |
|
Quoted
Prices in
Active
Markets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
||||||
Assets:
|
|
|
|
|
|
|
||||||
Cash and cash equivalents and restricted cash
|
|
$
|
220,891
|
|
|
$
|
220,891
|
|
|
$
|
—
|
|
Available-for-sale investments (1)
|
|
57,733
|
|
|
57,733
|
|
|
—
|
|
|||
Foreign exchange forward contracts (2)
|
|
1,160
|
|
|
—
|
|
|
1,160
|
|
|||
Assets measured at fair value at March 31, 2014
|
|
$
|
279,784
|
|
|
$
|
278,624
|
|
|
$
|
1,160
|
|
Liabilities:
|
|
|
|
|
|
|
||||||
Foreign exchange forward contracts (3)
|
|
$
|
(6,734
|
)
|
|
$
|
—
|
|
|
$
|
(6,734
|
)
|
Liabilities measured at fair value at March 31, 2014
|
|
$
|
(6,734
|
)
|
|
$
|
—
|
|
|
$
|
(6,734
|
)
|
(1)
|
Included in "Short-term investments" and "Long-term investments" on the Company’s Condensed Consolidated Balance Sheets.
|
(2)
|
Included in “Prepaid expenses and other current assets” on the Company’s Condensed Consolidated Balance Sheets.
|
(3)
|
Included in “Other accrued liabilities” and “Other non-current liabilities” on the Company’s Condensed Consolidated Balance Sheets.
|
Hedge Classification
|
Balance Sheet Location
|
|
Fair Value
as of March 31, 2014 |
|
Fair Value
as of December 31, 2013 |
||||
Foreign currency contracts
|
Prepaid expenses and other current assets
|
|
$
|
1,160
|
|
|
$
|
1,654
|
|
Foreign currency contracts
|
Other non-current assets
|
|
—
|
|
|
76
|
|
||
Foreign currency contracts
|
Other accrued liabilities
|
|
(2,669
|
)
|
|
(2,942
|
)
|
||
Foreign currency contracts
|
Other non-current liabilities
|
|
(4,065
|
)
|
|
(4,295
|
)
|
||
Total fair value of derivatives classified as hedging instruments
|
|
|
$
|
(5,574
|
)
|
|
$
|
(5,507
|
)
|
|
Three Months Ended
March 31, |
||||||
|
2014
|
|
2013
|
||||
|
|
|
|
||||
Gross of Tax Reclassifications
|
$
|
(33
|
)
|
|
$
|
33
|
|
Net of Tax Reclassifications
|
$
|
(20
|
)
|
|
$
|
20
|
|
Three Months Ended March 31, 2014
|
|||||||||||||||
|
Unrealized Gain on Investments
|
|
Foreign Currency Translation Adjustments
|
|
Unrealized Loss on Cash Flow Hedges
|
|
Accumulated Other Comprehensive Income
|
||||||||
Beginning balance
|
$
|
—
|
|
|
$
|
3,257
|
|
|
$
|
(2,404
|
)
|
|
$
|
853
|
|
Current-period change, net of tax
|
4
|
|
|
23
|
|
|
(308
|
)
|
|
(281
|
)
|
||||
Ending balance
|
$
|
4
|
|
|
$
|
3,280
|
|
|
$
|
(2,712
|
)
|
|
$
|
572
|
|
|
|
|
|
|
|
|
|
||||||||
Income tax expense (benefit) associated with current-period change
|
$
|
2
|
|
|
$
|
(167
|
)
|
|
$
|
(205
|
)
|
|
$
|
(370
|
)
|
Three Months Ended March 31, 2013
|
|||||||||||||||
|
Unrealized Gain/(Loss) on Investments
|
|
Foreign Currency Translation Adjustments
|
|
Unrealized Gain on Cash Flow Hedges
|
|
Accumulated Other Comprehensive Income
|
||||||||
Beginning balance
|
$
|
(46
|
)
|
|
$
|
4,301
|
|
|
$
|
926
|
|
|
$
|
5,181
|
|
Current-period change, net of tax
|
49
|
|
|
165
|
|
|
2,000
|
|
|
2,214
|
|
||||
Ending balance
|
$
|
3
|
|
|
$
|
4,466
|
|
|
$
|
2,926
|
|
|
$
|
7,395
|
|
|
|
|
|
|
|
|
|
||||||||
Income tax expense associated with current-period change
|
$
|
33
|
|
|
$
|
110
|
|
|
$
|
1,333
|
|
|
1,476
|
|
|
|
|
Unrealized
|
|
|
||||||
|
Cost
|
|
Gains (Losses)
|
|
Fair Value
|
||||||
Short-term available-for-sale securities
|
$
|
49,889
|
|
|
$
|
27
|
|
|
$
|
49,916
|
|
Long-term available-for-sale securities
|
7,838
|
|
|
(21
|
)
|
|
7,817
|
|
|||
Total
|
$
|
57,727
|
|
|
$
|
6
|
|
|
$
|
57,733
|
|
|
|
|
Unrealized
|
|
|
||||||
|
Cost
|
|
Gains (Losses)
|
|
Fair Value
|
||||||
Short-term available-for-sale securities
|
$
|
14,048
|
|
|
$
|
—
|
|
|
$
|
14,048
|
|
Long-term available-for-sale securities
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
14,048
|
|
|
$
|
—
|
|
|
$
|
14,048
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
Trade accounts receivable
|
$
|
44,947
|
|
|
$
|
169,417
|
|
Unbilled receivables
|
11,329
|
|
|
9,075
|
|
||
Advance billings
|
1,165
|
|
|
2,141
|
|
||
Other receivables
|
1,430
|
|
|
2,051
|
|
||
|
58,871
|
|
|
182,684
|
|
||
Allowance for doubtful accounts
|
(106
|
)
|
|
(157
|
)
|
||
Accounts and other receivables, net
|
$
|
58,765
|
|
|
$
|
182,527
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
Components and subassemblies
|
$
|
39,376
|
|
|
$
|
46,339
|
|
Work in process
|
15,880
|
|
|
23,618
|
|
||
Finished goods
|
62,938
|
|
|
25,172
|
|
||
Total
|
$
|
118,194
|
|
|
$
|
95,129
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
Deferred product revenue
|
$
|
59,174
|
|
|
$
|
54,065
|
|
Deferred service revenue
|
84,546
|
|
|
87,900
|
|
||
Total deferred revenue
|
143,720
|
|
|
141,965
|
|
||
Less long-term deferred revenue
|
(54,167
|
)
|
|
(50,477
|
)
|
||
Deferred revenue in current liabilities
|
$
|
89,553
|
|
|
$
|
91,488
|
|
|
Three Months Ended March 31, 2014
|
Risk-free interest rate
|
1.24%
|
Expected dividend yield
|
—%
|
Volatility
|
50.40%
|
Expected life
|
4.0 years
|
Weighted average Black-Scholes value of options granted
|
$11.01
|
|
Three Months Ended
March 31, |
||||||
|
2014
|
|
2013
|
||||
Cost of product revenue
|
$
|
52
|
|
|
$
|
27
|
|
Cost of service revenue
|
69
|
|
|
62
|
|
||
Research and development, net
|
761
|
|
|
386
|
|
||
Sales and marketing
|
751
|
|
|
516
|
|
||
General and administrative
|
889
|
|
|
735
|
|
||
Total
|
$
|
2,522
|
|
|
$
|
1,726
|
|
|
Standard Restricted Shares
|
|
Performance Vesting Restricted Shares
|
|
Total Restricted Shares
|
|||||||||||||||
|
Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
|
Shares
|
|
Weighted
Average Grant Date Fair Value |
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|||||||||
Outstanding at December 31, 2013
|
1,127,700
|
|
|
$
|
12.05
|
|
|
1,094,000
|
|
|
$
|
15.94
|
|
|
2,221,700
|
|
|
$
|
13.97
|
|
Granted
|
100,800
|
|
|
$
|
34.73
|
|
|
—
|
|
|
$
|
—
|
|
|
100,800
|
|
|
$
|
34.73
|
|
Forfeited
|
(5,000
|
)
|
|
$
|
26.01
|
|
|
(10,000
|
)
|
|
$
|
12.90
|
|
|
(15,000
|
)
|
|
$
|
17.27
|
|
Vested
|
(36,250
|
)
|
|
$
|
8.09
|
|
|
—
|
|
|
$
|
—
|
|
|
(36,250
|
)
|
|
$
|
8.09
|
|
Outstanding at March 31, 2014
|
1,187,250
|
|
|
$
|
14.04
|
|
|
1,084,000
|
|
|
$
|
15.97
|
|
|
2,271,250
|
|
|
$
|
14.96
|
|
|
Three Months Ended
March 31, |
||
|
2014
|
|
2013
|
Effective Tax Rates
|
42%
|
|
40%
|
|
Three Months Ended
March 31, |
||||||
|
2014
|
|
2013
|
||||
Revenue:
|
|
|
|
||||
Supercomputing
|
$
|
43,626
|
|
|
$
|
61,755
|
|
Storage and Data Management
|
8,065
|
|
|
16,282
|
|
||
Maintenance and Support
|
21,965
|
|
|
18,213
|
|
||
Engineering Services and Other
|
3,419
|
|
|
1,510
|
|
||
Elimination of inter-segment revenue
|
(21,965
|
)
|
|
(18,213
|
)
|
||
Total revenue
|
$
|
55,110
|
|
|
$
|
79,547
|
|
|
|
|
|
||||
Gross Profit:
|
|
|
|
||||
Supercomputing
|
$
|
13,223
|
|
|
$
|
16,257
|
|
Storage and Data Management
|
2,907
|
|
|
7,157
|
|
||
Maintenance and Support
|
10,214
|
|
|
9,160
|
|
||
Engineering Services and Other
|
1,807
|
|
|
736
|
|
||
Elimination of inter-segment gross profit
|
(10,214
|
)
|
|
(9,160
|
)
|
||
Total gross profit
|
$
|
17,937
|
|
|
$
|
24,150
|
|
|
United States
|
|
Other Countries
|
|
Total
|
||||||||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||||||
Three months ended March 31,
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Product revenue
|
$
|
10,463
|
|
|
$
|
31,144
|
|
|
$
|
19,552
|
|
|
$
|
28,724
|
|
|
$
|
30,015
|
|
|
$
|
59,868
|
|
Service revenue
|
17,744
|
|
|
13,472
|
|
|
7,351
|
|
|
6,207
|
|
|
25,095
|
|
|
19,679
|
|
||||||
Total revenue
|
$
|
28,207
|
|
|
$
|
44,616
|
|
|
$
|
26,903
|
|
|
$
|
34,931
|
|
|
$
|
55,110
|
|
|
$
|
79,547
|
|
•
|
Supercomputing with many-core commodity processors driving increasing scalability requirements;
|
•
|
Increased micro-architectural diversity, including increased usage of many-core processors and accelerators, as the rate of per-core performance increases slows;
|
•
|
Data needs growing much faster than computational needs;
|
•
|
Technology innovations in storage allowing for faster data access such as NVRAM and SSDs;
|
•
|
The commoditization of HPC hardware, particularly processors and interconnect systems;
|
•
|
Electrical power requirements becoming a design constraint and driver in total cost of ownership determinations;
|
•
|
Increasing use of analytics technologies (Hadoop, NoSQL and Graph) in both the HPC and big data markets;
|
•
|
The growing commoditization of software, including plentiful building blocks and more capable open source software; and
|
•
|
Cloud computing for cost-effective computing on loosely-coupled HPC applications.
|
|
Three Months Ended
March 31, |
||||||
|
2014
|
|
2013
|
||||
Product revenue
|
$
|
30,015
|
|
|
$
|
59,868
|
|
Less: Cost of product revenue
|
23,972
|
|
|
45,570
|
|
||
Product gross profit
|
$
|
6,043
|
|
|
$
|
14,298
|
|
Product gross profit margin
|
20
|
%
|
|
24
|
%
|
||
Service revenue
|
$
|
25,095
|
|
|
$
|
19,679
|
|
Less: Cost of service revenue
|
13,201
|
|
|
9,827
|
|
||
Service gross profit
|
$
|
11,894
|
|
|
$
|
9,852
|
|
Service gross profit margin
|
47
|
%
|
|
50
|
%
|
||
Total revenue
|
$
|
55,110
|
|
|
$
|
79,547
|
|
Less: Total cost of revenue
|
37,173
|
|
|
55,397
|
|
||
Total gross profit
|
$
|
17,937
|
|
|
$
|
24,150
|
|
Total gross profit margin
|
33
|
%
|
|
30
|
%
|
|
Three Months Ended
March 31, |
||||||
|
2014
|
|
2013
|
||||
Gross research and development expenses
|
$
|
25,078
|
|
|
$
|
20,980
|
|
Less: Amounts included in cost of revenue
|
(1,457
|
)
|
|
(754
|
)
|
||
Less: Reimbursed research and development (excludes amounts in cost of revenue)
|
(1,000
|
)
|
|
—
|
|
||
Net research and development expenses
|
$
|
22,621
|
|
|
$
|
20,226
|
|
Percentage of total revenue
|
41
|
%
|
|
25
|
%
|
|
Three Months Ended
March 31, |
||||||
|
2014
|
|
2013
|
||||
Sales and marketing
|
$
|
11,776
|
|
|
$
|
11,143
|
|
Percentage of total revenue
|
21
|
%
|
|
14
|
%
|
||
General and administrative
|
$
|
5,413
|
|
|
$
|
5,485
|
|
Percentage of total revenue
|
10
|
%
|
|
7
|
%
|
|
Three Months Ended
March 31, |
||||||
|
2014
|
|
2013
|
||||
Cash provided by (used in):
|
|
|
|
||||
Operating Activities
|
$
|
61,011
|
|
|
$
|
(71,728
|
)
|
Investing Activities
|
$
|
(66,665
|
)
|
|
$
|
(16,806
|
)
|
Financing Activities
|
$
|
702
|
|
|
$
|
1,143
|
|
|
Amounts Committed by Year
|
||||||||||||||||||
Contractual Obligations
|
Total
|
|
2014
(Less than
1 Year)
|
|
2015-2016
|
|
2017-2018
|
|
Thereafter
|
||||||||||
Development agreements
|
$
|
4,240
|
|
|
$
|
3,998
|
|
|
$
|
242
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating leases
|
18,670
|
|
|
3,546
|
|
|
8,184
|
|
|
4,797
|
|
|
2,143
|
|
|||||
Total contractual cash obligations
|
$
|
22,910
|
|
|
$
|
7,544
|
|
|
$
|
8,426
|
|
|
$
|
4,797
|
|
|
$
|
2,143
|
|
•
|
The delivered item(s) has value to the customer on a standalone basis; and
|
•
|
If the arrangement includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in our control.
|
•
|
It is commensurate with either of the following:
|
•
|
Our performance to achieve the milestone; or
|
•
|
The enhancement of value of the delivered item or items as a result of a specific outcome resulting from our performance to achieve the milestone.
|
•
|
It relates solely to past performance.
|
•
|
It is reasonable relative to all of the deliverables and payment terms (including other potential milestone consideration) within the arrangement.
|
Item 1A. Risk Factors
|
•
|
our ability to secure sufficient orders for our Cray XC30 and CS300 systems as well as upgrades and successor systems;
|
•
|
successfully delivering and obtaining customer acceptances of our Cray XC30 and CS300 systems;
|
•
|
our ability to successfully generate revenue and profitability from opportunities developed from our YarcData and storage and data management businesses;
|
•
|
our ability to scale our internal processes effectively to enable growth;
|
•
|
the level of revenue recognized in any given period, which is affected by the very high average sales prices and limited number of significant system sales and resulting potential acceptances in any quarter, the timing of product acceptances by customers and contractual provisions affecting the timing and amount of revenue recognition;
|
•
|
revenue delays or losses due to customers postponing purchases to wait for future upgraded or new systems, delays in delivery of upgraded or new systems, longer than expected customer acceptance cycles or penalties resulting from system acceptance issues;
|
•
|
our expense levels, including research and development expense net of government funding;
|
•
|
our ability to successfully and timely design, integrate and secure competitive processors for our Cray XC30 and CS300 systems and upgrades and successors systems;
|
•
|
the level of product gross profit contribution in any given period due to volume or product mix, particularly with the introduction of flexible commodity-based supercomputers, competitive factors, strategic transactions, product life cycle, currency fluctuations, acceptance penalties and component costs;
|
•
|
the competitiveness of our products and prices;
|
•
|
our ability to secure additional government funding for future development projects;
|
•
|
maintaining our product development projects on schedule and within budgetary limitations;
|
•
|
the level and timing of maintenance contract renewals with existing customers; and
|
•
|
the terms and conditions of sale or lease for our products and services.
|
•
|
the timely availability of acceptable or customer committed components, including, but not limited to, processors, in sufficient quantities to meet customer delivery schedules at a competitive cost;
|
•
|
the timing and level of government funding and resources available for product acquisitions and research and development contracts, which has been, and may continue to be, adversely affected by the current economic and fiscal uncertainties, increased governmental budgetary limitations and disruptions in the operations of the U.S. government;
|
•
|
the introduction or announcement of competitive or key industry supplier products;
|
•
|
competitor pricing strategies;
|
•
|
price fluctuations in the processors and other commodity electronics and memory markets;
|
•
|
general economic trends, including changes in levels of customer capital spending;
|
•
|
the availability of adequate customer facilities to install and operate new Cray systems; and
|
•
|
currency fluctuations, international conflicts or economic crises, including the ongoing economic challenges in the United States, Japan and Europe.
|
•
|
the level of product differentiation in our Cray XC30 systems and successor systems. We need to compete successfully against HPC systems from both, large established companies and smaller companies and demonstrate the value of our balanced high bandwidth systems;
|
•
|
our ability to meet all customer requirements for acceptance. Even once a system has been delivered, we sometimes do not meet all of the contract requirements for customer acceptance and ongoing reliability of our systems within the provided-for acceptance period, which has resulted in contract penalties and delays in our ability to recognize revenue from system deliveries. Most often these penalties have adversely affected gross profit at the time of revenue recognition through the provision of additional equipment and services and/or service credits to satisfy delivery delays and performance shortfalls. The risk of contract penalties is increased when we bid for new business prior to completing development of new products when we must estimate future system performance, such as has been required with our Cray XC30, Cray XE6 and Cray XK7 systems and will be required for subsequent systems;
|
•
|
our ability to source competitive, key components in appropriate quantities, in a timely fashion and on acceptable terms and conditions and that meet the performance criteria required. If we underestimated our needs, we could
|
•
|
whether potential customers delay purchases of our products because they decide to wait for successor systems or upgrades that we have announced or they believe will be available in the future.
|
•
|
difficulties in successfully integrating the operations, systems, technologies, products, offerings and personnel of the acquired company or companies;
|
•
|
insufficient revenue to offset increased expenses associated with acquisitions;
|
•
|
diversion of management’s attention from normal daily operations of the business and the challenges of managing larger and more widespread operations resulting from acquisitions;
|
•
|
potential difficulties in completing projects associated with in-process research and development intangibles;
|
•
|
difficulties in entering markets in which we have no or limited direct prior experience and where competitors in such markets have stronger market positions;
|
•
|
initial dependence on unfamiliar supply chains or relatively small supply partners; and
|
•
|
the potential loss of key employees, customers, distributors, vendors and other business partners of the companies we acquire following and continuing after announcement of acquisition plans.
|
•
|
use a substantial portion of our cash reserves or incur debt;
|
•
|
issue equity securities or grant equity incentives to acquired employees that would dilute our current shareholders’ percentage ownership;
|
•
|
assume liabilities, including potentially unknown liabilities;
|
•
|
record goodwill and nonamortizable intangible assets that are subject to impairment testing on a regular basis and potential periodic impairment charges;
|
•
|
incur amortization expenses related to certain intangible assets;
|
•
|
incur large and immediate write-offs and restructuring and other related expenses; or
|
•
|
become subject to intellectual property or other litigation.
|
•
|
Congressional failures or successes in addressing budget concerns, current economic uncertainty;
|
•
|
disruptions in the operations of the U.S. government;
|
•
|
"sequestration;”
|
•
|
the downgrading of U.S. government debt or the possibility of such action;
|
•
|
the political climate in the U.S. focusing on cutting or limiting budgets and their effect on government budgets;
|
•
|
the limits on federal borrowing capacity;
|
•
|
changes in procurement policies;
|
•
|
budgetary considerations including Congressional delays in completing appropriation bills as occurred in 2011, 2012, and 2013;
|
•
|
domestic crises;
|
•
|
political efforts to limit the activities of the National Security Agency, or NSA; including proposed state legislation that would limit or even criminalize doing business with the NSA for certain companies doing business with state governments; and
|
•
|
international political developments, such as the downgrading of European debt.
|
•
|
if a supplier does not provide components or systems that meet our specifications in sufficient quantities and with acceptable quality on time or deliver when required, or delays future components or systems beyond anticipated delivery dates, then sales, production, delivery, acceptance and revenue from our systems could be delayed and/or reduced and we could be subject to costly penalties even once delivered and accepted, which has happened during 2011, 2012, 2013 and 2014 and has at times significantly lowered our revenue for a particular quarter or year;
|
•
|
if a supplier cannot provide a competitive key component (for example, due to inadequate performance or a prohibitive price) or eliminates key features from components, such as with the processors we design into our systems, our systems may be less competitive than systems using components with greater capabilities;
|
•
|
if an interruption of supply of our components, services or capabilities occurs because a supplier changes its technology roadmap, decides to no longer provide those products or services, increases the price of those products or services significantly or imposes reduced delivery allocations on its customers, it could take us a considerable period of time to identify and qualify alternative suppliers, to redesign our products as necessary and to begin to manufacture the redesigned components or otherwise obtain those services or capabilities. In some cases, such as with key integrated circuits and memory parts or processors, we may not be able to redesign such components or find alternate sources that we could use in any realistic timeframe;
|
•
|
if a supplier of a component is subject to a claim that the component infringes a third-party’s intellectual property rights, as has happened with one of our suppliers, our ability to obtain necessary components could be adversely affected or our cost to obtain such components could increase significantly;
|
•
|
if a supplier providing us with key research and development and design services or core technology components with respect to integrated circuit design, network communication capabilities or software is late, fails to provide us with effective functionality or loses key internal talent, our development programs may be delayed or prove to be impossible to complete;
|
•
|
if a supplier provides us with hardware or software that contains bugs or other errors or is different from what we expected, as is occurring with a key component, our development projects and production systems may be adversely affected through reduced performance or capabilities, additional design testing and verification efforts, re-spins of integrated circuits and/or development of replacement components, and the production and sales of our systems could be delayed and systems installed at customer sites could require significant, expensive field component replacements or result in penalties;
|
•
|
some of our key component and service suppliers are small companies with limited financial and other resources, and consequently may be more likely to experience financial and operational difficulties than larger, well-established companies, which increases the risk that they will be unable to deliver products as needed; and
|
•
|
if a key supplier is acquired or has a significant business change, such as may occur with the proposed acquisition of the third-party original equipment manufacturers that supplies complete storage systems for our Sonexion product, the production and sales of our systems and services may be delayed or adversely affected, or our development programs may be delayed or may be impossible to complete.
|
•
|
harm to our ability to compete in relevant markets or in customer perception of our products;
|
•
|
unanticipated costs or adverse tax consequences;
|
•
|
exposure to potential liabilities to third parties or Intel, or claims for indemnification by Intel, including with respect to third-party litigation matters;
|
•
|
failure to successfully further develop our current products or disruption to our current or future product roadmaps and ongoing business;
|
•
|
delays and difficulties in receiving key components for our products from suppliers, including Intel;
|
•
|
loss of customers, vendors or alliances; and
|
•
|
failure to create shareholder value with the additional cash resources.
|
•
|
pay third-party infringement claims;
|
•
|
discontinue manufacturing, using, or selling particular products subject to infringement claims;
|
•
|
discontinue using the technology or processes subject to infringement claims;
|
•
|
develop other technology not subject to infringement claims, which could be time-consuming and costly or may not be possible; or
|
•
|
license technology from the third party claiming infringement, which license may not be available on commercially reasonable terms.
|
•
|
removal of a director only in limited circumstances and only upon the affirmative vote of not less than two-thirds of the shares entitled to vote to elect directors;
|
•
|
the ability of our Board of Directors to issue up to 5,000,000 shares of preferred stock, without shareholder approval, with rights senior to those of the common stock;
|
•
|
no cumulative voting of shares;
|
•
|
the right of shareholders to call a special meeting of the shareholders only upon demand by the holders of not less than 30% of the shares entitled to vote at such a meeting;
|
•
|
the affirmative vote of not less than two-thirds of the outstanding shares entitled to vote on an amendment, unless the amendment was approved by a majority of our continuing directors, who are defined as directors who have either served as a director since August 31, 1995, or were nominated to be a director by the continuing directors;
|
•
|
special voting requirements for mergers and other business combinations, unless the proposed transaction was approved by a majority of continuing directors;
|
•
|
special procedures to bring matters before our shareholders at our annual shareholders’ meeting; and
|
•
|
special procedures to nominate members for election to our Board of Directors.
|
Item 6. Exhibits
|
|
Exhibit
|
|
Exhibit Description
|
|
Incorporated by Reference
|
|
|
|||||||
|
|
|
|
Form
|
|
File No.
|
|
Filing Date
|
|
Exhibit/Annex
|
|
Filed Herewith
|
|
10.1
|
|
|
2014 Executive Bonus Plan
|
|
|
|
|
|
|
|
|
|
X
|
10.2
|
|
|
Offer Letter between the Company and Michael C. Piraino, dated August 31, 2009
|
|
|
|
|
|
|
|
|
|
X
|
10.3
|
|
|
Amended and Restated Non-Employee Director Compensation Policy
|
|
|
|
|
|
|
|
|
|
X
|
31.1
|
|
|
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
|
X
|
31.2
|
|
|
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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X
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32.1
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Certificate pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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X
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*
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Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.
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CRAY INC.
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Date:
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April 29, 2014
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/
S
/ P
ETER
J. U
NGARO
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Peter J. Ungaro
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President and Chief Executive Officer
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Date:
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April 29, 2014
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/
S
/ B
RIAN
C. H
ENRY
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Brian C. Henry
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Executive Vice President and Chief Financial Officer
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Date:
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April 29, 2014
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/
S
/ C
HARLES
D. F
AIRCHILD
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Charles D. Fairchild
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Vice President, Corporate Controller and Chief Accounting Officer
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1.
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Administrator
- This Plan
sha
ll
be administered by the Committee in accordance with Plan provisions.
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2
.
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Authority -
The Committee shall have
a
ll
powers
and
discretion necessary or
appropriate
to interpret
and adm
inist
er
the Plan and
to
control
it
s
operation. Such
authority
includes
se
l
ecting
Participants
in
the Plan, determining Bonus Targets for
eac
h
Participant, determining Performance Measures
and
Bonus Formulas
to score
performance, determining which Participants
shall
be granted Bonus Awards,
and
determining the form and manner in which Bonus Awards will be made (which may
include e
l
ective
or mandatory deferral alternatives)
.
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3.
|
Decisions Binding
-
All determinations
and
decisions made by the Committee pursuant to the provisions of the Plan
sha
ll
be final,
conclus
iv
e
and binding on
a
ll
persons,
and sha
ll
be given the
max
imum
deference permitted by
l
aw.
|
4.
|
Delegation by Committee
-
The Committee,
in
its
so
l
e
discretion and on
such term
s
and
conditions as
it
may provide, may delegate
a
ll
or part of its authority
and
powers under the Plan to one or more directors and/or officers of
the Company;
provided, however,
that the
Committee
shall
review and
approve all
recommendations
for any
payments pursuant to the Plan prior to
such
payments being made
.
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5.
|
Term of Plan
-
Once
approved
by the Committee, this Plan
sha
ll
be
effective at
the
start
of the Performance Period
.
Once
approved,
this Plan shall continue until the
ear
li
er
of: 1) the
end
of the Performance Period;
2)
termination of the Plan
as
described in the
"Amendment and
Termination Provisions"
section
below; or 3) termination of Participant from
the
Company's
emp
loy
,
with respect to that Participant.
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1.
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Performance Period
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2.
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Executives who will be Participants for the Performance Period
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3.
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Bonus Target for
each
Participant
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4.
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Performance Targets for
each
Participant
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5.
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Bonus Formulas for
each
Participant
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1.
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The
effects
of currency fluctuation
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2.
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Any or all
items
excluded, or that could
be
excluded,
from
the calculation of
non
-
GAAP
earnings as refl
e
cted
in
any
Company press release or
8
-
K filing relating
to an earnings announcement
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3.
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Asset
write
-
downs
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4.
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Litigation or
claim
judgments or
settlements
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5.
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The
effect
of
changes
in tax law,
accounting
principles
or other such
laws or provisions
affecting
reported results
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6.
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Accruals for reorganization
and
restructuring programs
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7.
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Any other
extraordinary or
non
-
operational
items
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8.
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Acquisition
or
disposition
costs
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9.
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The
gain
or losses
as a
result of
a
Board
approved acquisition
or disposition, including current year impact
on
bonus year targets planned without
consideration
of the
transaction
.
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1.
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Timing -
The Company
shall
distribute Bonus Awards to Participants as
soon as
is
administratively
practicable following the determination
and
written certification of the
Committee
for a Performance Period, but in no
event
later than March 15
of
the year
following
the
end of the
fiscal year
for which the
Committee determines the
Bonus
Award.
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2.
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Active Employment
-
Payment of
a
Bonus Award requires that Participant be
an active employee
on the Company's payroll no later than September
30, 2014 and
remain
active
until the last day of the Performance Period,
subject to subsection
4 below. The Committee may make
exceptions to
the
active
employment requirement in the case of retirement, death or disability, or in the case of
a
corporate change in control, in each case determined on its own merits by the Committee.
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3.
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Manner of Payment -
Bonus Awards will be payable in cash
as
a
single
lump
sum, subject
to
all applicable
taxes and contributions required by law to be withheld in accordance with procedures
established
by
the
Company. Bonus Awards for Participants who become
eligible
after
the
first day
of
the Performance Period will be prorated
accordingly.
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4.
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Change in Status
-
A Participant whose
change
in
status
or move to part time results in he/she being ineligible
to
participate in this Plan in a Performance Period may receive
a
prorated Bonus Award,
at
the
sole
discretion of
the
Committee. A Participant whose change in
reporting
responsibilities results in he/she being ineligible to participate in
this
Plan in a Performance Period may receive
a
modified Bonus Award,
at
the
sole
discretion of the Committee. No Participant
shall
have
any
right to
a
prorated or modified Bonus Award,
and the
method in which
a
Bonus Award may be prorated or modified
shall
be determined by the
Committee
in its
sole
discretion.
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5.
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Recoupment of Bonus Award
-
If the Company's reported financial
or operating
results become
subject
to
a
material restatement,
the Committee
may require Participant to
pay
to the
Company an amount
corresponding to the Bonus Award that Participant received under
this
Plan, or
a
portion of
such award, that
the
Committee
determines would
not
have been paid if Company
results as
originally published had been equal to Company results
as subsequently
restated
.
Any requirement
or
claim
to recoup a
Bonus Award must be made, if
at all,
within five (5) years after the date the
amount claimed
was originally paid by the
Company.
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6.
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Code Section
409A
-
It is intended that this Plan comply with the requirements
of Code
Section 409A
so
that none of the Bonus Award payments to be provided under this Plan will be
subject to
the
additional tax
imposed under Code Section 409A. Any
ambiguities
will be interpreted to
so
comply.
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1.
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Amendment, Modification,
Suspension, Termination,
or Reinstatement of
Plan
-
The Board
of
Directors
or
the Committee may
amend,
modify,
suspend, terminate
or reinstate this Plan, in whole
or
in part,
at any time,
including
adopting amendments
deemed necessary or desirable to correct any defect
or
to
supply omitted
data, to reconcile
any
inconsistency in this Plan or in any Bonus Award
granted
hereunder or to
adapt the
Plan, including, but not limited to, Performance Measures under this Plan, to material changed
circumstances
(as determined by the Committee in its
sole
discretion).
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2.
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Plan Variations for non
-
U.S. Participants
-
For Participants
employed
outside the United States, the Company may vary the provisions of this Plan as deemed
appropriate
to
conform
with, as required by or made desirable by, local laws, practices and procedures.
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1.
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Non-transferability of Awards
-
No Bonus Award
granted
under the Plan may be sold,
transferred,
pledged,
assigned,
or otherwise
alienated
or hypothecated, other than by will, by the laws of descent and distribution, or to the limited
extent
provided in
the
prior
subsection
.
All rights with respect to
a
Bonus Award
granted
to
a
Participant
shall
be available during his or her lifetime only to the Participant.
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2.
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No Additional Participant Rights
-
Employees
selected
to participate in this Plan shall not have
any
right to be retained in the Company's
employ,
and the right of the Company to dismiss
such
Participant or to terminate
any arrangement
pursuant to which any such Participant provides
services
to the Company, with or without cause, is
specifically
reserved. No person
shall
have claim to a Bonus Award under this Plan,
except as
otherwise provided for herein, or
to
continued participation under this Plan. There is no obligation for uniformity of treatment of Participants under this Plan. The benefits provided for Participants under this Plan
shall
be in addition
to
and
shall
in no way preclude other forms of compensation to or in respect
of such
Participants.
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3.
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Successors
-
All obligations of the Company under this Plan with respect to Bonus Awards shall be binding
on
any successor to the Company, whether the
existence
of
such successor
is the result
of a
direct or indirect purchase, merger,
consolidation,
or otherwise, of all
or substantially all
of the business or
assets
of the Company.
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4.
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Indemnification
-
Each member of the Company's Board
of
Directors and
each
Committee member
shall
be indemnified
and
held harmless by the
Company against and
from (i)
any
loss, cost, liability, or
expense
that may be imposed upon or reasonably incurred by him/her in connection with
or
resulting from
any
claim, action,
suit, or
proceeding
to
which he/she may be
a
|
5.
|
Severability
-
The
provisions of this Plan
are severab
l
e.
If
a
court of competent jurisdiction rules that
any
provision
of this
Agreement is invalid or
unenforceable, the
court's ruling will not
affect
the validity and
enforceabi
li
ty
of the
other
provisions of this Plan.
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6.
|
Requirements of Law
-
Bonus awards
granted
under this Plan
sha
ll
be
subject to al
l
applicab
l
e
l
aws, rules and regulations, and
to
such approvals
by
any governmental agencies or
n
a
tional
secur
i
ties excha
nges
as
may b
e
required.
|
7.
|
Governing Law
-
The
validity, interpr
e
tation, construction
and
performance of the Plan
and awards
under it shall be
governed and
int
erpreted
in accordance with the
law
s
of the State of Washington.
|
•
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health and dental care
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•
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life insurance
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•
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Section 125 Flexible Spending Plan
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•
|
401 (k) Plan
|
•
|
stock purchase plan.
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•
|
Board: $25,000 annual fee, paid quarterly
|
•
|
Audit Committee: $15,000 annual fee, paid quarterly
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•
|
Compensation Committee: $10,000 annual fee, paid quarterly
|
•
|
Corporate Governance Committee: $5,000 annual fee, paid quarterly
|
•
|
Strategic Technology Committee: $5,000 annual fee, paid quarterly
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(a)
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
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evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
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(d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
(a)
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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April 29, 2014
|
/s/ PETER J. UNGARO
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Peter J. Ungaro
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President and Chief Executive Officer
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(Principal Executive Officer)
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(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
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evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
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(d)
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disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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(a)
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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April 29, 2014
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/s/ BRIAN C. HENRY
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Brian C. Henry
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Executive Vice President and Chief Financial Officer
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(Principal Financial Officer)
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Date:
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April 29, 2014
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/s/ PETER J. UNGARO
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Peter J. Ungaro
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President and Chief Executive Officer
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(Principal Executive Officer)
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Date:
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April 29, 2014
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/s/ BRIAN C. HENRY
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Brian C. Henry
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Executive Vice President and Chief Financial Officer
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(Principal Financial Officer)
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